World Cup 2014: March of the white elephants

By Andrew Downie in São Paulo

While England fans are asking about goal line technology in stadiums during the next World Cup, Brazilian fans are simply asking about their stadiums.

Even with four years to go before Brazil hosts the 2014 competition, experts reckon at least six of the 12 grounds to be used for games will turn into white elephants when the tournament ends.

Brazil’s football stadiums are old and crumbling and it is to renovate or build 12 arenas at an estimated cost of around R$5.3bn (around $2.9bn). Nine of the 12 grounds are publicly owned and more than 90 percent of that total expenditure is expected to come from public coffers. The government development bank is offering a credit line of R$400m ($220m) for each stadium.

However, the planning has so far been typically Brazilian, i.e. bureaucratic, disorganised and slow. In May, football’s governing body FIFA criticised Brazil for being “amazingly late”.

Substantial work on the stadiums has yet to start, even though Brazil was chosen as the venue for the tournament almost three years ago.

A new report by auditors Crowe Horwath RCS said stadiums in Brasilia, Cuiabá, Fortaleza, Manaus, Natal, and Recife are overly expensive and have little chance of recouping their costs after the tournament.

Tellingly, those stadiums are all in cities where there is no major football team to fill the ground on a regular basis after the Cup or where ticket prices are so low they can’t possibly recoup their investment.

Stadiums in the larger and richer cities of Rio de Janeiro, São Paulo, Belo Horizonte, Curitiba, Porto Alegre, and Salvador are less of a concern.

The answer is to build smaller stadiums (always an issue with FIFA, which says the smallest World Cup grounds must seat at least 30,000), or make them just one part of a complex that includes shops, hotels, convention centres or other such attractions.

One other option – cutting back the number of venues from 12 to 10 or even eight – is perhaps the most likely. The tardy preparations already have officials publicly suggesting that could happen.

It would save money. And blushes.

Global equities macromap

Number of the day

240p The new offer for Cove Energy shares from PTT, trumping the bid from Shell.

beyondbrics

The emerging markets hub

About this blog Headlines email Blog guide
News and comment from more than 40 emerging economies, headed by Brazil, Russia, India and China.



'Like' our beyondbrics Facebook page, where we showcase a top story of the day
Sign up for our news headlines and markets snaphot service. We have two emails per day - London and New York headlines (sent at approx 6am and 12pm GMT).

To comment, please register for free with FT.com and read our policy on submitting comments.

There is an overall beyondbrics RSS feed, as well as feeds for all our countries, tags and authors. Learn more in our full RSS guide.

All posts are published in UK time.

Get in touch with us - your comments, advice and even complaints. Find out how to contact the team.

See the full list of FT blogs.

BB shortcuts

Regulars Series Archive
Chart of the week
Behind the numbers

Fund flows
Tracking money in and out of EM bonds
12 for 2012
Guest posts on key trends for the year ahead

Brics at 10
A decade of growth
The Diaspora Digest
EM diasporas, seen through their community media (Oct-Nov 2011)
Sick brics (Sep 2011)
Brics and mortar (Aug 2011)
Beyondbrics on the beach (Jul-Aug 2011)
China bubble? (June 2011)
Post-election Nigeria (June 2011)
Hey bric spender (Aug 2010)

Emerging markets data

Archive

« Jun Aug »July 2010
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031  

What we are writing about

Apple banking bonds Brazil economy Brics CEE China economy consumer corruption currencies currency war debt energy equities eurozone crisis exports FDI food & drink guest post Hugo Chávez IMF India economy inflation interest rates internet investment IPOs M&A manufacturing mining monetary policy oil & gas politics Repsol retail Russian elections Russian politics tax technology telecoms trade vehicles video World Bank YPF